Utility MACT and Reliability: One More Brief Post

Posted on January 31, 2012 by Seth Jaffe

When I last posted on the potential impact of the Utility MACT rule on electric system reliability, I swore I was done with the subject. I knew then it was probably a mistake. Yesterday, FERC announced that it has issued a White Paper on how it will respond to requests by generators to EPA for an extension of time to comply under the Utility MACT rule. Since FERC has invited comments on the White Paper, it seemed worthy of note.

As those who have followed the progress of the MACT rule know, EPA has allowed a basic compliance period of three years. EPA has also provided for a one-year extension in some cases. Beyond that, EPA has provided that facilities which cannot comply within 4 years and which are critical to electric system reliability may seek a further extension through an administrative order. EPA also provided that it will take comment from experts, including FERC, on applications for such further extensions.

The White Paper sets forth FERC staff’s views on how FERC should handle such requests for comment. The process would be as follows:

  • AO requests would be filed with the Commission Secretary (It is important to note that all AO requests must include a “concurrence with the reliability risk analysis” by the relevant “Planning Authority”, such as an ISO, or an explanation as to why such concurrence cannot be provided.)
  • Requests would be treated as informational filings.
  • Intervention would not be allowed.
  • FERC review “should be whether, based on the circumstances presented, there might be a violation of a Commission-approved Reliability Standard” in the absence of the extension.
  • The White Paper reserves the question regarding whether FERC review will be de novo or grant some deference to the analysis provided by the Planning Authority.

The White paper notes that it is specifically seeking comment regarding both the scope of its review of AO requests and the level of deference, if any, to give to the Planning Authority analysis. Comments may be provided by February 29, 2012, at the eFiling link on the FERC web site.

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Perhaps The Next Coastal Project Won't Take 10 Years: The First Circuit Preempts Some State Authority

Posted on October 27, 2009 by Seth Jaffe

Public and private developers spend a lot of time talking about NIMBY, or Not In My Backyard. With the increasing number of coastal development projects, ranging from wind farms to LNG facilities to plans for casinos, we should perhaps be talking about another acronym: NIMO, or Not In My Ocean. Yesterday, a decision from the First Circuit Court of Appeals in Weaver's Cove LNG v. Rhode Island Coastal Resources Management Council gave some hope that NIMO will not mean that states can simply squelch development of ocean resources.

Weaver’s Cove, as originally proposed in 2003, was to be an LNG terminal  located up the Taunton River, in Fall River, Massachusetts. To address safety and related concerns, the proposal has been moved off-shore.

The only element of the project that is subject to the jurisdiction of Rhode Island authorities is dredging that would be necessary in Rhode Island waters. That dredging requires a federal consistency determination by the Rhode Island Coastal Resources Management Council, or CRMC. In addition, Rhode Island state law requires that the CRMC provide a license to the project, known as an Assent. Here, the CRMC refused to provide either the federal consistency determination or the state law Assent. Weaver’s Cove LNG sued, won in the District Court, and won again yesterday at the Court of Appeals.

The facts of the case are complicated and the Court limited the decision as far as it could to the case-specific facts. Nonetheless, there are two points to be gleaned from the decision that may be of broader import

The Coastal Zone Management Act contains a provision, specifically intended to prevent states from frustrating the purposes of the CZMA, which provides that, if a state fails to act on a consistency request within six months, the state’s concurrence is “conclusively presumed.” Here, Rhode Island argued that the clock hadn’t begun to run, because Weavers’ Cove hadn’t provided all of the information necessary for CRMC to make a consistency finding. The Court didn’t buy it. Again, the facts here won’t translate to other cases, but what will transfer is the Court’s refusal simply to accept Rhode Island’s request that the Court defer to a state agency’s interpretation of its own law. Calling the CRMC’s interpretation of Rhode Island law “untenable” and “clearly erroneous,” the Court rejected it and held that, because of the CRMC’s failure to act, consistency would indeed be “conclusively presumed.”

Perhaps even more significantly, the Court concluded that the Rhode Island law which would require that the CRMC issue an Assent before the project could move forward is preempted by the Natural Gas Act (NGA). While the Court did not find that the NGA explicitly preempted Rhode Island law or that it occupied the field, it did conclude that, in this case, state law conflicted with the NGA. 

Notwithstanding the Court’s efforts to limit its preemption holding, I think it will provide grist for preemption arguments in other cases, as will its reluctance to defer to state agency interpretation of state law, where such deference might create obstacles to the accomplishment of federal objectives.

It’s too much to say that this decision represents the end of NIMO. However, it’s also difficult to see this as totally abstracted from an awareness by the Court of the delays experienced by the Cape Wind project. We’ve got to figure out a way to get to an answer more quickly. The answer my be “no” to some projects, but it shouldn’t take six years to get an answer.

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